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Ukraine: government has intention to bring gambling back to Ukraine

On December 11, 2015 the Cabinet of Ministers of Ukraine has officially submitted for consideration of Ukrainian Parliament the Draft Law of Ukraine “On legalization of the gambling market and ensuring budget revenues with the purpose to fulfil social obligations” (the “Draft Law”) elaborated by the Ministry of Finance of Ukraine. The Draft Law, in case of its adoption by the Parliament, shall establish legislative framework for revitalizing gambling in Ukraine which has been banned since 2009.

In particular, the Draft Law allows mostly all types of gambling activities, i.e. lotteries, casinos and sportsbooks which can be carried out subject to obtaining by operators of respective licenses. There overall nine types of licenses stipulated in the Draft Law, namely:

License on issuance and carrying out of lotteries;

License on organization of gambling in land-based casinos;

License on the each particular gambling table or slot machine in casino;

License on organization and carrying out casino games in Internet;

License on carrying out poker game in Internet;

License on the poker tournament;

License on organization and carrying out of sportsbook activity;

License on the each particular sportsbook office;

License on organization and carrying out of sportsbook activity in Internet.

Additionally, the Draft Law provides for general conditions for obtaining the said gambling licenses, establishes particular amounts of license fees depending on the type of license, stipulates mandatory requirements to gambling operators, etc.

It is important to say that the Draft Law provides for possibility of carrying out casinos (incl. poker), sportsbooks and arguably lotteries activities online.

It shall be also mentioned that the Draft Law stipulates establishing of the new state body – State gambling service – which would regulate the gambling industry in Ukraine. The State gambling service is the body to be established by the Cabinet of Ministers of Ukraine and thus controlled by it.

At the same time the Draft Law does not specifically address the matters of taxation of gambling activity. However, these matters are covered by the new wording of Tax Code of Ukraine the draft of which has been also recently submitted to the Parliament by the Cabinet of Ministers of Ukraine.

As of today the Draft Law has not yet been considered by Ukrainian Parliament, however based on publically available information the Cabinet of Ministers of Ukraine has strong intention to lobby its adoption by the end of this year and its voting in Ukrainian parliament is scheduled on 17 December 2015. Such intention of government is caused by the fact that the Cabinet of Ministers of Ukraine has already considered the proceeds to the budget out of gambling activity while preparing draft of state budget of Ukraine in 2016 which is currently also being under consideration in Ukrainian Parliament.